Topic: Gold collapsing. Bitcoin UP. - page 549. (Read 2032289 times)

The real problem for the SNB now is that in order to create the peg in the first place and hold the CNF at an artificially depressed value (compared to market conditions) the SNB had to purchase significant EUR holdings in order to fight market demand.

Now the SNB has to unwind these EUR holdings, but to do so will exacerbate the original condition they were trying to hold back, i.e. they now have to unwind and sell those EUR holdings which will cause further upward pressure on the CNF.

This is how all of what I'd call "artificial pegs" end. Not only do they fail, but after they fail all the manipulation now goes in the opposite direction. Same is true for other current currency manipulations (i.e. China).

The only method a peg can work is if there is a "fixed" quantity controlled on both sides of the peg and the market can trade back and forth across that freely. A good example was the US gold standard that lasted for a period of time. In it the US fixed an amount of gold per dollar, to do so it had to maintain the gold:dollar reserve ratio by only issuing dollars in relation to the gold it held. i.e. to release a new dollar required acquiring the same amount of gold.

Inevitably governments fail at this (such as FDR's massive default), but it is only because governments always end up releasing more dollars than they have reserves for because it is free and easy, but market reality always catches up. The other way pegs fail is when an entity does not control the supply on both sides.

A peg where both sides are fixed in quantity or only go up/down in fixed relation to each other can work.

Quoted for posterity.  Gems like this only come along so often, and are the kinds of things that a deeply self-concious guy like cypherdoc is prone to delete.  He assumes that everyone is as confused and mentally overloaded as he is won't notice such an action.

Arguments are pointless, minion. So are laws. Shut up and conform.

If the 'manipulator' stops, that's what you get.

As of today it did.

So the world's safe haven currency (CHF) just had a 30% move in minutes.  The volatility argument against bitcoin just flew out the window.

my favorite, EUR/CHF:

ouch!

DRR double short Euro:

Wow I knew it was coming... the average joe's are not allowed to win and this proves the theory of rigged markets again and again. After seeing USDJPY take off because BOJ said 80 was the floor... SNB said 1.2 was the floor so every little joe with a forex account had long positions... ofcourse hedged against market manipulators which are interested in squeezing these longs and making money. Add them all up and there was alot of profit to make if the floor broke... and the longer it took the more profit there was. I bet alot of oversized bets and people averaging in as it went lower trying to break even but 1.2 -> 0.75 thats what 5000 pips? I dont think retail forex accounts even off low enough leverage to not have that margin your account even with the smallest lot trade. Ofcourse it was going to break... the market was against SNB... they needed to devalue like BOJ did and now JPY is on its way to becoming worthless instead of too strong.

This is another nail in the coffin for currencies from central banks. Might trigger a massive influx of capital to crypto..

Doc this is why my views of the market turn out right most of the time.. its simply doing the opposite, i've seen this movie too many times... in other words.. if you're long so are others and that means im short.

Plus another thing about this is that most of these moves have hidden agenda's...the guy in control of the policy "knows" about the huge payoff if he put in a massive short position right before calling out the peg has failed... in fact when he set the peg the guys wife had a huge long position and made hundreds of millions of $ in profit from naked shorts who lost their shirts! I'm sure him and his family/friends made money as well as any other big whale who was playing contrarian. Policies which change the value of a currency shouldn't be allowed to happen like this, should be based on a vote and consensus so EVERYONE KNOWS ITS COMING, and not just the select few ofcourse which won't even be investigated.

Just the fact that pegs are put in place and not part of a consensus is what brought me here... and makes me think that long term centrally backed and controlled currencies are prehistoric and a thing that our grandkids will read about in history books about how stupid people were back in the day.

Does that make me a stacker by proxy? I have the mighty sum of 35.30CHF! Who knows what it will be worth tomorrow

The bottom line is that MP and his followers are not an economic majority in Bitcoin, and he doesn't have any good arguments to bring people over to his side - his influence is limited to his ability to extend his cult of personality.

It would be nice to see him using what influence he has for good, but oh well.

The Swiss Franc is a proxy for gold.  Unpegging it from the Euro unleashes chaos.  Not quite a black swan, but still a perturbation in the currency wars.

Sure it is.

If Blockstream can change it once,  surely they can change it twice. Or more. That is, if we let them.

but unlike CHF/EUR, the SC 2wp would be irremovable (barring *another* protocol change). is it fair to compare?

How do you transfer fiat between Bitfinex and the Chinese exchanges in less than two days?

Everyone knew it would come, but only the inner circle knew when.
Pegs always fail. 
Why the Blockstream folks like to use the word for the SC "currency that is a wallet for bitcoin" still baffles me.

Don't make your currency a side chain to another currency.

This.

The problem is what the hell do you do!?